The Daily Update - US and China relations / Brexit

Firstly … RIP Muhammad Ali, sportsman of the 20th century, who died over the weekend, aged 74, after a 32 year battle with Parkinson's disease. He did indeed float like a butterfly and sting like a bee.

Today in Beijing, government officials from the world’s two largest economies meet for the annual US-China Strategic and Economic Dialogue (S and ED), where they will address a wide range of global and economic issues as well as regional ones. Interestingly, this annual meeting was initially set up by the Bush administration when it was called the Senior Dialogue and Strategic Economic Dialogue.

In his opening speech this morning, the Chinese President, Xi Jinping, said the countries needed to establish "fundamental, strategic, mutual trust," adding "There is no reason to be scared of having differences, the key is not to adopt a confrontational attitude towards any differences".

Of course this will be President Obama’s last S and ED, and many in Washington believe he wants to discuss areas where there are likely to be agreements rather than politically sensitive subjects; China’s activities in the South China Sea and the currency to name a couple, where producing any solid policies are seen as a long shot. As Scott Kennedy, director of the project on Chinese Business and Political Economy at The Center of Strategic and International Studies (CSIS) put it "The U.S. is looking for issues they can push on an open door and get some kind of agreement. They are not making progress on currency, even though they said they don't want to talk about it. Other big issues like the South China Sea are also difficult. The Chinese have already committed to tackling overcapacity so bringing it up is a smart strategy," adding "The S and ED is a place where the U.S. wants to go home with a list of accomplishments to show American people what they've achieved".

Also over the weekend in the UK there were 3 EU referendum polls, all showing an improvement for the leave campaign. The YouGov poll has the Remain/Leave vote neck and neck on 41%, a survey of Daily Telegraph subscribers showed 69% intended to vote leave and a poll of polls of the most recent 6 polls has the Remain camp just 2 points ahead. Sterling slid against the US dollar on the back of the polls, trading as low as $1.4353 at time of writing, the lowest level in 3 weeks, as well as slumping against 8 out of 10 G10 currencies.